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september 11th and a feeling of vulnerability that has persisted on several flying since then. so what have not heard is often discussions of, you know, if we pass this measure will that help? and you have to remember also that washington really believes in zero sum politics. this is not an orgnal ..e that the leaders on both sides have not been so much about how we fix a problem but gain and maintain power. and so a lot of these discussions have been about how the republicans rolled back the obama administration, making we can then ultimately overtaken and how they maintain that power once they have it. i mean, cloaked in the argument of what is good for america, but there is not allow a policy prescription in there.
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>> thank you. >> this event took place at the seventeenth annual texas book festival in austin, texas. for more information visit >> tell us when you think of your programming this weekend. comment on our facebook call or send us an e-mail. nonfiction books every weekend on c-span2. >> next, chrystia freeland talked about a rise of the superrich, the.-- the top of the population and the impact they have in the world. this is hosted by politics and prose bookstore in washington d.c. and it is about an hour.
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[applause] >> thanks a lot. sorry to keep everyone waiting. i will say a few things about what is in the book. as i have been doing some interviews with my book, a favored way of interviewers in the conversation is to save the rich have always been with us after all. actually, that is not true. one of the points, the starting point of my book is to say actually things are different now. we really need to be aware of this new political and economic reality that incoming quality has grown hugely in the united
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states and the industrialized world and around the world and a lot of the action is at the very top -- is that better? i am so short i have to move the mike. a lot of the action is at the very top of the income distribution. this gives you a quick sense of how things have been changing. i will give you make a few quick numbers. in the 1970s, the top 1% accounted for roughly 10% of the national income in the u.s.. that number now is above 25%. what is more striking is the top 0.1%, 10% of the 1% is now close to 8% so 10% of the 1% is today with increasing distance of where the 1% was in the 70s.
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i am not talking about incumbent wealth. if you take the wealth of two admittedly hugely rich people, bill gates and warren buffett, their wealth is equal to the collective wealth of the bottom 40% of the income distribution in the united states. two got a very cool to the bottom 1 twenty million americans. that is pretty big. interestingly, this was a surprise. i sold my book to the publishers in september of 2008 just before the financial crisis and then the crisis happened and many people were sad and i had a particular reason for sorrow because i thought the entire premise of my book is gone. the superelite is over. this financial crisis has happened, surely this system is
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going to change completely and these superfortunes will be wiped out and there will be a real calibration. i wrote a new book proposal. but after six months i was talking to my publishers and we said actually, that proposal is still going to work. the data of borne that out. i would like to talk about it as the 1% recovery. if you look at -- it is true. if you look at the economic recovery, the numbers in terms of income distributions in 2009 and 2010 economic recovery, a couple of economists, guys who were the real data jocks on income distribution especially at the top, they crunched the numbers for 2009, 2010 and found the economic recovery, 93% of the income recovery in that period went to the top 1%.
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what was even more astonishing, they found, 37% of the recovery went to the top 0.01%. admitted leave those people at the top had been hit particularly hard as they tended to have financial assets that had gone down but that is a pretty big rebound. in the top 0.01%, amounted to $4.2 million per family. when you think about this polarization in america, why are these different views throughout the world part of it is they are very different worlds that people are in happening. having said that, my premise is this isn't just a case of the rich have always been with us. something different is happening and it is important to talk about it, to research it and figure out what is going on. but actually there's a real reluctance, and i would say
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particularly in america, and i am canadian so i see you guys with a little bit of a distance. there's a reluctance to talk about these issues of income distribution. one of my friends who is supposed to be here tonight, a world bank economist who wrote a good book and income inequality, i talked to him about this and he said that -- i am going to quote him, he said i was once told by the head of a prestigious think tank in washington d.c. that nothing came board was unlikely to fund any work that had income or wealth inequality in its title. yes, they would finance anything to do with poverty but in the quality was an altogether different matter. why? because my concern is the poverty of some people, actually projects me in a nice, warm
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glow. i am ready to use my money to help them. charity is a good thing. a lot of egos are boosted by it and a lot of ethical points turned with only tiny amounts given to the poor. but inequality is different. every mention of it raises the issue of the appropriateness or legitimacy of my income. that is absolutely true. that is why even when you have a discussion about the general issue of income inequality, once you start saying actually a lot of action is in the top 1% or the top 0.1% people get really anxious and you are accused of being a class warrior. my nicest moment so far with the publication of my book is i gave an early talk about this in chicago and bill daley was on the panel and he spoke after me and started to talk by saying actually i guess it is okay to talk about income inequality. i said yes, that is right.
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is okay. what are the drivers? what is causing this big gap? rather obviously, the people who are most interested in talking about income inequality tend to be on the left. the left really likes to talk about the political drivers. the left likes to talk about how taxes have fallen, the culture has become more open to really high ceo compensation than it used to be, decline in the rights of unions, deregulation, and all those things are factors. but i think it is a real mistake to ignore the economic drivers as well. and there are very powerful underlying economic drivers. globalization, the technology revolution, and one reason it is pretty clear that those are key
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drivers is this is a global phenomenon and i do sometimes think the american discourse tends to be very american so i am quite interchange when i read about a paper that says rising income inequality in the united states is due to this one particular law passed in the 1980s. and how does that account for rising income inequality in canada? or even in france, in germany, in the united kingdom? it is happening all over the world and the emerging market. it is important to face that squarely because if you see it just as a political phenomenon you are going to lose sight of what i think is a big challenge which is that these actually quite benign economic forces, and i love the technology revolution. are also drivers of social and political consequences which are not quite so benign. the way i like to look at it, and this is a quote from peter
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orszag, how he sees it is the big drivers are probably the economic forces but the issue is that particularly in the united states the politics, instead of trying to mitigate these very powerful economic forces, has exacerbated them. even if you have economic forces creating more concentration at the very top you expect politics to try to soften the blow, financial institutions to soften the blow and instead it is accelerating and to me that is about right. who are the superrich guys and what do they think of the rest of us? i would say the way i would characterize them as a group and this is a global group, these are the global alpha peaks. they do tend to be -- this is different from a kind of downtown abby set up, speaks to
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the economic drivers as a phenomenon. these are really hard working people and one of the interesting things when you look even at the data about the hours worked is for the first time people have counted this work of thing you have less leisure at the very top than you do in the middle. these are people who are really hard working, tend to at least think of themselves as self-made. i am going to use self-made as a generous concept so you can have an affluent dad like bill gates does for mitt romney does that still some of yourself as self-made because you make your own business. he didn't inherit the business that made your multimillionaire and that is important with how they think of themselves in the world. it is important for these guys to be really numerous. one of the things i found really interesting and quite international is this is the age of mastery of numbers. my favorite example of this, seems to make sense when you
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think of silicon valley guys or the wall street guys, i bet you if you in your mind's ira imagining the russian oligarchs you think some fancy italian suit with a mall on one side and guys with guns on the other side and this is true, but also probably has a ph.d. in math or physics. this is true also of the chinese, the indians, also a really global -- this is another key characteristic in something quite different from previous the leads, that because the capital flows are global, and they are living really global lives. one of them said to me we are people who no flight attendants better than we know our own wives. i thought this shows you are not actually a true plutocrat because you have your own plane. the wife of one of them said to
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me and this could have been -- she may have been exaggerating for effect, she said my husband in new york is a big money manager and they were talking about a new york cultural thing. talking to both of them she was talking about it with enthusiasm and does your husband know about this? she said my husband? his feet do not touch the sidewalk in new york. a car pools up in the morning, take him to his office, the car pulls up, takes him to his lunch and then back to the office and takes him home. the only place that he walks, davos because the streets are so crowded. it is one of the things that adds to the down-home ambiance of davos. they can't use their cars because the streets are so crowded it is faster to walk. davos is the only place he walks. they are really global. what is their relationship to
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the rest of us? and this is really a key issue and it is complicated. on one hand, i think even as we are living in this period of a bigger divide between the very top and everybody else, as big as it has ever been and arguably bigger than ever, calculated the world bank economist doing calculations, the richest guy in history, the romans, the middle ages, he concludes the richest person who ever lived is carlos slim. arguably a bigger gap than ever but interestingly culturally in some ways that gap is masked. bill gates in 2010 spoke to a group of students and one of them asked what does it feel like to be a billionaire? he said after the first couple
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million it doesn't make that much difference. after all, a big mac costs the same amount of money for you as it does for me. i interviewed eric schmidt and i interviewed him in his office when he was the ceo of google. his office was probably from this podium to that armchair, probably certainly no longer than that, may be shorter. from the desk to the bookshelf. a really small office. when i went in, there was a white board that had all kinds of equations scribbled on it. journalists like to suck up to the people we are interviewing to get them to disclose their true secrets. i said that is amazing. you are still an engineer, still writing equations on the white board. he said no, no, i didn't write that. whenever i am not in my office
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anybody on the floor who needs the space to work can just come in and use my office. /ceo of one of the biggest companies in the world, small office, very dressed down, anyone can use his office, i talked to him about the culture of the valley and he said one thing is it is culturally not allowed here to have a driver. that is simply not done. you can have a private jet but you are not allowed to have a driver. so all of this stuff which says there's not really a gap, but of course there really is a gap, a really big gap. i will turn for a moment to the russians, who i know the best of all. . the very revealing moment. i interviewed the russian oil tycoon in 1998, and he was the richest man in russia. kind of a bad way.
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and this is what he said to me about oligarchs and everybody else. if the man is not an oligarchic something is not right with him. everyone had the same starting conditions, everyone could have done it. and he really meant it. very heartfelt and not criticizing himself, he lost $100 million, he had stupidly entrusted a non oligarch. and this non oligarchic by definition not a smart guy, a few hundred million dollars. there is a little bit of that thinking a lot of these guys and it is interesting because very strong parallels, the parallel with the industrial revolution.
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there's a line from andrew carnegie which is very similar soak carnegie said the talent for organization is rare among men, approved by the fact that it is reward for its possessor. if a man is not an oligarch something is wrong with him. and services can be obtained as partner, the man whose service can be obtained as a partner for the first consideration such as render the question of his capital that we are considering. such men soon create capital and in the hands of those with special talent required capital takes names. there is a boil elements to it. there is a sense of being
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self-made, hard-working kind of condition, you might imagine that would create sort of closer ties, greater sympathy with the rest of us. what i found is in many ways to create a greater distance. a few places where i observed this is first of all talking to people in this group about the hollowing out of the american middle class and what is going on and what it means. i found a lot of people really sort of feeling that it was economic inevitability and not necessarily a bad one. here are a few things. greenwich based hedge fund manager, liberal arts college in the united states, he said to me the low-skilled american is the most overpaid worker in the world. he said it is sad but true. the american base ceo of one of
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the world's largest fund managers, in the investment committee. they tell me things like they didn't say it but there friend said it. my kids do that. this is someone else on the investment committee said. is point was the transformation of the world economy lift poor people in china and india into the middle class and one american drops out of the middle class, that is not such a bad trade, 4-1. i spoke to a cfo of a u.s. technology company and this is a person with a charming and lovely life story, his parents were immigrants and he told me his parents told him and his brother when they immigrated that they were temporarily for. imagine that, temporarily poor and sure enough complete rock
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stars, both of them went to new york. and the mass club, one brother in silicon valley and another is derivative on wall street. the technology cfo, his parents were really angry at him because he dropped out of a ph.d. program in applied math at stanford having gone to harvard to start becoming plutocrats. very hard-working guy, did smart, did great, this is what he said about the american middle-class. we are demand higher paycheck than the rest of the world. if you are going to demand ten times the paycheck you need to deliver ten times the value. it sounds harsh but maybe people of the middle-class need to decide to take a pay cut. similarly, less forgivable a, the kind of stuff talking about the financial crisis. in 2008-2009, i expected the
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wall street guys to feel bad, to feel gillie even, i realize you don't tell the truth to a reporter but these are off the record conversations and i found almost inevitably they didn't blame themselves. here is who they blame the. this eo, the wall street investment bank, tells me sincerely did not feel guilty for the crisis, the real culprit was his cousin who owned three cars and bar too much for a house he could not afford. guys like his cousin cause the financial crisis. a hedge fund guy, told me the same thing, this time it was his in-laws. the private equity guy, leveraged-buyout, was in new york and palm beach, he said it
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is my golf caddy. i have a golf caddy in arizona, bought three kondos. how could golf caddy afford three condos, we got the financial crisis. this has a certain distance from the woes of the middle-class. even more surprising the growing sense of victimization, you may be taken aback by that. they really do, give you a few examples. and he is the guy who is behind marisa mayor, as an investor does great things, december of 2010 he sent an e-mail to his
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friends and the subject heading was battered wives and the battered wives were the wall street financiers who were accepting the abuse of president obama and the e-mail actually, written in the voice of a battered wife said he really love the sand when he hits us he doesn't mean it and most of the time it doesn't show and goes on in that vein. comparing himself to battered wives. another guy i spoke to, silicon valley investor and founder of a semiconductor company, the victimization of the superrich has become so extreme in united states that they are being treated like an oppressed ethnic minority. he feels the president should be particularly ashamed of treating them this way since he knows
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what it is like. as for hitler analogy is, i am not even surprised any more. it is commonplace. efforts to revoke the tax on the special tax treatment of carried interest which is particular benefit for private equity, famously compared this to hitler's invasion of poland. to get the story of the piece for the new yorker. and by the way, one of our conversations he said there are so many parallels between the rise of barack obama and the rise of hitler. i don't mean to compare them of course but there are a lot of parallels and he went on and on
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and on. it is a very commonplace thing. the other concept which was really astonishing to me was this sense not just of victimization but that the middle class those them. the sense that kind of being taken for granted and not being treated at well. so i would like to introduce you to the concept of self tax. the person who introduced me to this concept is foster fleece, wyoming mutual fund investor, multimillionaire and you may have heard his name because he was the chief backer of the rick santorum super pac. i interviewed him in february and asked about taxes, do you think rich people should pay more taxes? he said people don't realize how well the people self tax.
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there's a fellow who is ceo of target. recreated a museum of music. he put in $200 million of his own money. i have another friend to give $400 million to a facility in south dakota or someplace like that. look at bill gates to gave $750 million to fight aids. we should get rid of taxes as much as we can because you get to decide how you spend your money rather than the government. if you have a certain cause, an art museum and want to support it it would be nice to have the choice to support it. where we are headed you will be taxed, your money taken away and the government will support it. it is a question. do you believe the government should be taking your money and spending it for you or do you want to spend it for you. you went on to say actually, it is absurd to tax the reproductive billionaire guys because of everything they do for us.
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if you look at what steve jobs has done for us, what bill gates has done for society, the government ought to pay them. why do they collect money from bill gates and steve jobs for what they contributed? is ridiculous. he also talked about the 47% and how dangerous they are. just a reminder that that is a very familiar concept. these are the attitudes and ways of thinking, in a way paradoxically, meredith kranick, working superrich, there is a more fragile connection to the middle-class man in the prior age. in conclusion, i just wanted to take us all for one moment to venice in the 14th century. in the fourteenth century, the
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beginning of the fourteenth century, venice was one of the biggest cities in europe, one of the biggest and richest and that is remarkable. if you have ever been there, geographically is such a crummy place. foggy, mosquito ridden, lagoons, very hard to build and the reason the italian ended up there was the hon is chased them off of the good land. here it was, incredibly rich and powerful state sending its trade missions all the way to china. controlling, controlling lands along the croatian coast, controlling land is very far into the italian in land, how did they do it? nations -- we'd like going there. to probably the most open economic system of that time. they have a particular form of contract system which allowed very unusually, if you were a
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person willing to take on risk, even if you didn't have capital you could share in a deal with a partner who did have capital got a trading mission and the guy didn't have capital the risk his life took a share of the profits. this really was the reason you had a huge mercantile figure and wealth of venice. but in the fourteenth century, as venice was getting going, the guys at the top realized having this open economy was a little bit uncomfortable because you guys have to coming up. you had your capital and were hanging out at home but didn't feel like going to china and possibly dying anymore. you guys who did were coming up and pushing you out of the elite. so they introduced the official book of the political oligarchy and if you were in it you were one of the ruling oligarchs and if you weren't you weren't.
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this was seen as not just historians today who say this was the moment they close their society comment at the time phoenician's immediately felt this was the closing of their political and economic system and they call that the closure. it is an important story because what it says is economies that are robust and have a mayor autocratic thrusting elite that can make money, that can add figuring economic growth, the guys who get to the top are not necessarily going to have that incentive to keep an open and in fact they might be tempted to tilt the rules of the game in their own favor because that is what we all like to do if we had the power to do it. when i was writing my book i talked to a lot of historic economic historians of the industrial revolution and economists today and we all agreed the economic
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transformation we are undergoing is very similar to the industrial revolution and it change, the vigorous economic growth, very difficult social economic consequences and most of the economy side talk to -- it means in the medium term and in the long term we will be ok when the industrial revolution, that kind of work, one answer is to say that in the long run we are all dead. another answer is to remember the social and political accommodations, ok for everybody, was hardly simple, it was a two world wars, a great depression, a communist revolution in china and russia and in the united states the progressive era, the new deal,
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the invention of an entire array of social and political institutions. we forget the extent to which the world we live in didn't exist 150 years ago at all and people really realize people were scared at the end of the nineteenth century. they didn't know what they had created and they were scared enough to be invented and to realize society had to change dramatically as the economy did. my conclusion would be to say we are in a comparable year right now of wrenching change where there's a superis a beach that has done incredibly well. people in the middle are being hollowed out, and we need someone to start inventing those institutions. thank you very much. [applause]
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>> that was terrific. i have been looking forward to coming here. my question follows from what you left, you talk about the plutocrats but more the lawyers, about the ordinary people who are losing, who are very angry at people, at poor people who they think the government is basing their tax money on. they don't have much to do with the people you talk about who are causing the problem. and somehow in hate teen 90, in 1910, in 1932 they had no difficulty, ordinary people, people at the bottom, figuring out to was at fault. i grew up in the 50s and 60s and graduated college in 1969, it is a different you cannot even imagine. we fought in 1960 we were
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building on the basic foundation of the new deal and now the new deal itself is under threat. the stuff we took for granted. why don't they realize it this time? republicans want that kicked down rather than up. why do they believe it? e elizabeth warren is saying exactly the right things, the corporations are to blame and need to be reined in, that we need a fairer society and it will work better economically if people -- the country will grow faster. she is having a tough time in massachusetts. that is my people's republic of massachusetts i grew up in and why? >> two ways of thinking about it. one is in my book and one is beyond the scope of my book, i
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do think there has been some powerful cognitive capture especially before the financial crisis and this notion of i know plutocrats smoking cigars and talking about how they're going to grind the proletariat and ritter boot, that doesn't happen but what did happen, particularly up to 2008 what i would describe as the establishment really buying into the notion that trickle-down is going to work and particularly that the regulation is going to work and my favorite example i write about which i looked at kind of horrified me, it was widely reported, in january of 2007, mike bloomberg and chuck schumer, not the hard right, commissioned a report on why new
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york was falling behind at the financial center compared to london and you can google it in 30 seconds it is shocking. the single biggest thing holding back the u.s. economy is overly harsh regulation of credit derivatives, there's a whole sort of section and credit derivatives, we need less regulation of them otherwise london is going to take over global finance and what was amazing at the time everybody agreed from this report, elliot spitzer was quoted saying how great this was, chuck schumer was one of the sponsors, in the u.k. labor running the u. k, and labor critics said this report shows even the labor is spending too much money -- there was this very widespread bipartisan kind
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of economic faculties of the western world that bought into this and that played a big role. this is a big difference, between now and the response to the industrial revolution, government -- people know government and don't necessarily like it. americans like government less, my own native canadians or things about the olympics, and the british choosing that as a symbol of what was good about britain. part of what happens i will refer you to another book called the submerged state by a woman called suzanne network who was a political scientist at cornell and it is really interesting. there is this a bipartisan deal since the reagan era to kind of hide funding of state services. the way it worked was the only
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way democrats could get state service funding through congress was by farming it out, by having non state bodies deliver assistance and that kind of thing and the results is americans -- americans don't actually recognize when the government is doing good things for them. >> thank you. >> leads to my question -- i don't know if you coverage but the attitude toward the plutocrats in europe, they are used to heavy taxes. but you talk to those people, do you have that same under current of resentment, thinking the american plutocrats got it right and we're overattacks even worse or are they more enlightened? >> i would say the envy of the
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american plutocracy among plutocrat pled to the rest of the world, they feel it is pretty good to be american, very good to the singapore, that is also excellent, monaco, very good place, belgium not too bad but the europeans feel that america -- george soros said to me the great thing about being a rich guy in america versus europe is in america if you are rich people look up to you. in europe not necessarily. there is definitely that sense. what is interesting is similar attention their evident in europe too and similar reactions. we have been following france and the tax atop moving up to 70% and the reaction moving to belgium, not for tax purposes except protect purposes, in switzerland interestingly there is a huge national revolt against the superrich and don't
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pay a high tax rate. there are similar tensions in but terror is certainly a more extreme dynamic in the united states. >> which u.s. government policies in your view perpetuate the transfer of wealth between the middle class and the top 1%, and could you rank them in importance including for example -- >> that would take all night. >> please address and include the tax equity, inequities between herndon come, and capital gains, the federal reserve policy of low interest rates, the emphasis on spending rather than saving, the reward
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given to borrowers rather than savers. >> from that famous line in when harry met sally, i will have what she had and the ones i would single out, because it is so egregious to carry interest treatment. i find that amazing and i find amazing that four years of a democratic president still hasn't managed to roll that back. how can that be? and .2 i find amazing i have yet to talk to a private equity person now that how liberal and some of these guys served democratic administrations, and hugh talk to them about this political thing and i expected them to say it is fabulous that we have it but it is unfair, they are adamant that it is absolutely morally correct, this
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treatment, and enraged that it gets questioned. that would be one. not because it makes such a difference. i save this and if you are paul ryan you say come on, that doesn't make any difference in balancing the budget. doesn't make much of the difference but the injustice is enraging and the other thing that is important was regulation, particularly of those industries where the whole industry is based on what is a regulatory framework and most visibly finance stand if you want to talk about the greatest rip-off of the american middle class, and the middle class around the world, the regulatory failure leading up to 2008, it didn't have to be like that. i don't want to say canada is the most perfect country in the world because there are problems but one thing that is a great counterexample which shows you can have a normal civilized economy, cars and computers and
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live like a normal person and still regulate your bankers, is canada. canada did not have a financial crisis even though the rest of the world did, because the canadian government and canadian regulators said no to their banks and was hard. it was interesting talking to canadian authorities, canadian finance minister said we are so out of step with the rest of the world that i went to beijing and the chinese said you comedians, your bank regulation is so conservative, it is absurd, here i am, i am a tory and the communist chinese are telling me i am too tough at regulating by banks and still they held the line. i give them so much credit and as you may have seen the average wealth of the canadian family is higher for the first time in my life than the american family so if you want to talk about what is a rip-off of the american middle-class my number one would
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be failure of bank regulation. >> can i ask one more quick question? a long answer. >> i am sorry. i'm going to stand up for everybody else here. >> one of carl sagan's book was about creating a colony on one of the planets. i assume they're working on this because my question is about the recognition that these people have for how much they depend on the rule of law and public infrastructure, public treasuries saving them for example. i wonder if you could talk about their own psyche on the fertility of their fortunes based on possible instability. >> of course it varies. what i was surprised by was there is something of -- you
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quote carl sagan but there's also a ayn rand and john bell fantasy and i was surprised at the extent to which that is kind of current. truly. so there is an actual effort to build -- peter t. o, the paypal guy is one of the founders of the and this is more beautiful than a journalist couldn't make it up. one of the driving intellectual forces is milton friedman's grandson. they're trying to build these islands, in international waters, where no laws would apply. you could just go and create your kind of world. there were some people that are quote in my book, bore you by looking at up, when obama gave
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his speech last fall, the evocative fdr commonwealth club speech immediately there were some investor notes that pointed out a new planet had been discovered and suggested all the rich people should move there because it wasn't going to be nice to live in america anymore. more than you would think there's a sense -- a very ayn rand sense that you got a sense for, we give him so much, we are the job creators, we are the innovators, and one other related cftc guy was speaking with passion and pleasure about bringing transparency to the swap market and how this was important because had there been the transparency which will be at place in the beginning of 2013 things like the london
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whales that lost jpmorgan so much money would be more visible. i couldn't resist so i said is jamie dimon grateful to you? is he saying thanks for giving this transparency to the market slide and get stuck again, i don't expect them to be grateful. our interests are a little different. >> a quote and a question. something you said brought back the words of the latin latin american priest i gave food to the poor and they called me a saying. i asked why the poor call it had no food they called me a communist. my question is about the personal politics of the superare rich in america. you touched on it but did you find anything surprising or counterintuitive about the personal politics, democrat or republican of those you interviewed? >> i shared most of it. what i did find surprising was
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the democrats still have a hard time. when you touched on their particular areas of self-interest they had a hard time. that i did find really surprising. the only other thing i would say, and this might be interesting for you, someone who is interesting talking about this, seattle-based investor with an early amazon investor build a bunch of software companies and he had written a book whose title i have forgotten but will be googleable and he made a point that is truly excellent which is he says he thinks the reason you have this very sort of emotional reaction in the billionaire class towards obama and this extreme sense of victimization among people who are not doing that badly is he thinks it has been so central to them to feel
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not only affluent but also righteous, that particularly since the reagan era there has been this equation of being a successful business person with contributing to the social good, that in some way the size of your bank balance was a measure of your virtue and trickle-down was working, the richer you were the better person you were. by being rich you being good. i am quoting an hour, i don't want to pretend this is my own original insight but it is a very good one. pieces that is so great because if you are rich and don't have to feel bad when you see a homeless person, when you and feel like i deserve to be rich because i didn't build it myself and by the way in being rich i have done good in things for everybody else also, they should be grateful to me, because that
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is such a comforting place to be and that is being challenged. i personally don't think the president's rhetoric around this issue has been particularly harsh but if you talk to the rich guys every single one of them thinks it is harsh bleach and guys who were in clinton's cabinet think it is harsh and it sounds so harsh to the mark would argue because even a little bit of a challenge of being in this place of absolute virtue is very painful. only two more questions are allowed. it is the regulator. >> this picture you present so eloquently of the west increasingly dominated by small, concentrated groups with well and political power and cultural power as well, also a separate from the rest of the mass of
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humanity. i have seen this in your interview, when somebody suggested a return to the new deal type politics seems to me rejected as not a possibility. weekend reverse the trajectory we have now so given that, you have any notions as to how the situation can be improved? how the middle class can regain its footing and stop the depletion, what would you recommend? >> i don't mean this at all as the commode but there's a lot of intellectual work people have to do. i do strongly think it is a mistake. and go back to the 1950s. i don't think those jobs exist anymore. not enough of them.
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when people i saying this is the return of manufacturing and how great that is have you looked at the wages that are now being paid in detroit for the newly hired people? $13, $15. >> in sweden and norway which successful societies salaries are very high and in germany as well. >> because of oil. >> sweden and germany. >> i think sweden and germany -- >> and japan. >> i would be careful about yearning too much for japan. sweden, denmark and germany are interesting. what they have done with the deal between labor and capital and the deal across society so the german reaction to the recession was instead of laying people off, people would effectively take a pay cut of 30%. it takes a lot of social unity to have that. having said that, i would say i
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think it is going to take more than going to be social democracies of northern europe because you are feeling these tensions in those northern european countries and you would be surprised the extent to which this discourse we are having you could have the same discussion in berlin and stockholm and particularly in berlin because what germans are realizing is they did not hollow out the german middle-class but the middle-class of the rest of europe. they are the china of the e.u.. that is one way to do it. the only other thing i might say which is kind of funny and a reaction i like in my book is a senior european goldman sachs guy who i do quote in my book send me an e-mail saying he had read it and i opened it with trepidation because i thought what is it going to say?
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he said something -- i am paraphrasing -- i just read your book, terrifying. i think i am going to have to move to sweden. when you even have the goldman sachs guys thinking of the swedish model is the only one the works that says something. >> thank you. >> i am not sure i know how to phrase this question but did you see any difference between the people that actually did create something, the oligarchs that did like bill gates and the guy from apple, steve jobs commack as compared to the people on wall street who i call paper manipulators or something, is there any difference in their attitudes? bill gates, i don't think, behave as though he is entitled person but i don't know him personally but he is doing a lot with his money that is good.
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i don't know about people on wall street. >> there are differences. certainly talk to any of these guys and each will say in the abstract the guys who got rich off purely by manipulating the government are very bad. i of course am not one of them. every single one sees the world that we. even the russian oligarchs see the world that way. i made my own fortune. all the other guys manipulated the government but not me. i found that with the americans too. if you talk to silicon valley guys they feel the most righteous and i think they should. if they love to criticize the wall street guys. it is one of their favorite activities. they see a very clear line.
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having said that as soon as they have the power to become a monopoly they try to be one. think about microsoft. we have to be a little bit careful about falling fully into the black sheep white sheep and usually the silicon valley guys and the middle class, this is why i am a sort of suspicious of an analysis that sees this purely as a rent seeking phenomena and not worried about the underlying economic forces, just today, facebook had an investor call, and they announced how many people they had employed at the end of the third quarter. think in your mind guess what the number is? 4,300. facebook employs 4,300 people. if you want to know what is happening to the middle-class, that single fact tells you a helluva lot. that is not because anybody is
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bad, is this economic force that is ripping through society. >> thank you. [applause] >> thank you for coming, we started late. >> is there a nonfiction author or boat to would like to see featured on booktv? send us an e-mail at or two us at >> here is a look at some books being published this week. a scholar whose work focuses on probability and uncertainty provide a followup to his best-selling book the black swan. is titled antifragile, things the gained from disorder. james patterson examines how political and social changes in the u.s. reshaped the country over the course of a single year in the eve of destruction:how

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CSPAN November 24, 2012 9:30am-10:30am EST

Chrystia Freeland Education. (2012) 'Plutocrats The Rise of the New Global Super-Rich and the Fall of Everyone Else.' New.

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